Questions 9 - 12 refer to the following time series: Year: 0 1 2 3 4 Sales: 12 14 19 23 18 9. The value of the three-year centered moving average that corresponds to year 1 will be a. 15. b. 14. C. 18.7. d. 13.3. 10. The value of the four-year centered moving average that corresponds to year 2 will be a. 16.50. b. 21.00. C. 17.75. d. 18.25. 11. For the smoothing constant a - 0.6, the exponentially smoothed value for year 2 will be 3. 14.3. b. 15.7. c. 16.4. d. 16.7. 12. For the smoothing constant a - 0.6, the exponentially smoothed forecast for year 2 will be a. 12.0. b. 13.2. c. 13.6. d. 14.0.13. In using exponential smoothing to dampen the fluctuations in a time series, for which of the following values of the smoothing constant will the smoothed series "catch up" most quickly whenever the original time series changes directions? a. a = 0.1 b. a - 0.4 c. a - 0.7 d. a - 0.9 14. In determining monthly seasonal indexes, the first step is to construct a centered moving average with a period of N- months. a. 2 b. 4 c. 12 d. 24 15. In determining monthly seasonal indexes for sales, the sum of the 12 mean values for sales as a percentage of the moving average is 1187. To get the seasonal indexes each monthly meat must be multiplied by a. 1200/1187. b. 1187/1200. c. 100. d. (1200 + 1187)/2. 16. For the trend equation p - 10(2)3, with x - 0 for 1988, the forecast for 1994 will be a 30. b. 640. C. 120. d. 810.17. Compared to the MAD criterion, the MSE criterion a. is less applicable to time series that have a negative trend. b. more heavily penalizes larger estimation errors. c. is rarely appropriate for evaluating the fit of an estimation equation. d. There are no differences between these two criteria. INVENTORY MODEL 1. Which of the following is a basic component of an inventory control system? a. planning what inventory to stock and how to acquire it b. forecasting the demand for parts and products c. controlling inventory levels d. developing and implementing feedback measurements for revising plans and forecasts e. all of the above are components of an inventory control system 2. Which of the following is a valid use of inventory? a. the decoupling function b. to take advantage of quantity discounts c. to avoid shortages and stockouts d. to smooth out irregular supply and demand e. all of the above are valid uses of inventory 3. One assumption necessary for the EOQ model is instantaneous replenishment. This means a. the lead time is zero. b. the production time is assumed to be zero. c. the entire order is delivered at one time. d. replenishment cannot occur until the on-hand inventory is zero. 4. If the EOQ assumptions are met and a company orders the EOQ each time an order is placed, then the a. total annual holding costs are minimized. b. total annual ordering costs are minimized. c. total of all inventory costs are minimized. d. order quantity will always be less than the average inventory. 5. If the EOQ assumptions are met and a company orders more than the economic order quantity, thena. total annual holding cost will be greater than the total annual ordering cost. b. total annual holding cost will be less than the total annual ordering cost. c. total annual holding cost will be equal to the total annual ordering cost d. total annual holding cost will be equal to the total annual purchase cost. 6. The reorder point is a. the quantity that is reordered each time an order is placed. b. the amount of inventory that would be needed to meet demand during the lead time. c. equal to the average inventory when the EQQ assumptions are met. d. assumed to be zero if there is instantaneous replenishment. 7. If the EQQ assumptions are met, then 3. annual stockout cost will be zero. b. total annual holding cost will equal total annual ordering cost. C. average inventory will be one-half the order quantity. d. all of the above are true. 8. In the production run model. the maximum inventory level will be a. greater than the production quantity. b. equal to the production quantity. c. less than the production quantity. d. equal to the daily production rate plus the daily demand. 9. Why is the annual purchase (material) cost not considered to be a relevant inventory cost if the EOQ assumptions are met? a. This cost will be zero. b. This cost is constant and not affected by the order quantity. c. This cost is insignificant compared with the other inventory costs. d. This cost is never considered to be an inventory cost 10. A JIT system will usually result in a. a low annual holding cost. b. very few orders per year. c. frequent shutdowns in an assembly line. d. high levels of safety stock. 11. The inventory position is defined as a. the amount of inventory needed to meet the demand during the lead time. b. the amount of inventory on hand. c. the amount of inventory on order.d. the total of the on-hand inventor},r plus the onorder inventor}. l2. Hnational chain ofgge tters stoclcs a popular gmfor which ofle following information is available: Average usage 140 mg per day Minimum usage PEI Egg; per day Maximum usage 175 W per day Lead time 10 to 115 day's Reorder quantitj,r 3,004] meg, Based on the data above, at what level of stocks should a replenishment order be issued? a. 2,240 Hil- b. c. 3,[|'|3|E| Hil- d. 13. A. national chain efgy, tters stocks a populargor 1tl.'hichthe following information is available: Average usage 140 W per day Minimum usage PEI Egg; per day Maximum usage 175 mg per day Lead time 10 to 115 day's Reorder quantitj,r 3,004] meg, Based on the data above, what is the maximum level of stocks possible':J a. 2,3130 W b Bil-DD m c 4,900 m :1 5,19% m 14. The following information available regarding a particular component Component price 2? Component usage 5,1300 per month Cost of placing an order 21] Cost of storing components or one year 1 'E'Er of stock value The economic order quantity for the component [to the nearest unit] is: a. 293 units b. 361 units c. 2,931 units d. 15,492 units If. The economic order quantity is: a. the order quantity which minimizes the total of stock ordering and holding cost. b. the order quantity used for special ordering purposes. c. the order quantity used for buffer stock. d. the order quantity used to avoid stock-out. 16. In the formula EOQ =SQRT(2DCo) / (Co), ifD = annual demand, which of the following statements are true? Co = cost of an item of stock True b. False 17. In the formula EOQ = SQRT(2DC.) / (Ch), ifD = annual demand, which of the following statements are true? Ch = cost of storing an item of stock True b. False